XM Radio 2009 Annual Report Download - page 12

What is a proxy?
A proxy is a person you appoint to vote on your behalf. We are soliciting your vote so that all shares of
our common stock may be voted at the annual meeting.
Whom am I designating as my proxy?
You will be designating Patrick L. Donnelly, our Executive Vice President, General Counsel and
Secretary, and Ruth A. Ziegler, our Senior Vice President and Deputy General Counsel, as your proxies.
However, you may appoint a person (who need not be a stockholder) other than Patrick L. Donnelly and Ruth
A. Ziegler to represent you at the meeting by completing another proper proxy.
How will my proxy vote my shares?
Your proxy will vote according to your instructions. If you complete your proxy card but do not indicate
your vote on one or all of the business matters, your proxy will vote “FOR” all items. In addition, your proxy
is authorized to vote on any other business that properly comes before the annual meeting in accordance with
the recommendation of our board of directors.
What happens if a nominee for director is unable to serve as a director?
If any Common Stock Director nominee becomes unavailable for election, votes will be cast for such
substitute nominee or nominees as may be designated by our board of directors, unless our board of directors
reduces the number of directors on our board.
Who is soliciting my proxy, and who will pay the costs of the solicitation?
SIRIUS XM is soliciting your proxy. The cost of soliciting proxies will be borne by SIRIUS XM, which
has engaged MacKenzie Partners, Inc. to assist in the distribution and solicitation of proxies. We have agreed
to pay MacKenzie $10,000 and reimburse the firm for its reasonable out-of-pocket expenses. We will also
reimburse brokerage firms, banks and other custodians for their reasonable out-of-pocket expenses for
forwarding these proxy materials to you. Our directors, officers and employees may solicit proxies on our
behalf by telephone or in writing.
What is the purpose of the Rights Plan?
Our rights plan was adopted in April 2009. The purpose of the Rights Plan is to help preserve the long-
term value of our NOLs. The Rights Plan is designed to deter the acquisition of our common stock in excess
of amounts that could inhibit our ability to use the NOLs to reduce our future taxable income.
What are NOLs, and how important are the NOLs?
NOLs are net operating losses (“NOLs”) for U.S. federal income tax purposes. We had approximately
$8 billion of NOLs as of December 31, 2009. NOLs are a significant asset that could save up to almost
$2.8 billion in taxes over the next 17 years. Because the amount and timing of our future taxable income, if
any, cannot be accurately predicted, we cannot estimate the exact amount of NOLs that we can ultimately use
to reduce our federal taxable income. Although we are unable to quantify an exact value, we believe the NOLs
are a very valuable asset. Our board of directors believes that the Rights Plan is an important tool in avoiding
adverse impacts to our NOLs that could result from an “ownership change” for tax purposes.
What acquisitions will the Rights Plan deter?
Subject to certain limited exceptions, the Rights Plan would restrict any person from buying our common
stock if the acquisition would result in a stockholder (or several stockholders, in the aggregate, who hold their
stock as a “group” as defined under the federal securities laws) owning 4.9% or more of our common stock.
5